Bloomberg reporter Mark Pittman was among those in the business press skeptical about the Feds assurances. Pittman, a reporter in his early 50s, had entered journalism out of college, covering cops and crime at the Coffeyville Journal in Kansas. After brief stints at other papers, he brought that experience to finance reporting when he joined Bloomberg News in 1997. You end up with a big BS detector as a cops reporter because the cops lie to you, the victims lie to you, the people helping the victims lie to you, Pittman said in 2009. And youve got to sort through, and there will be a story that seems a certain way and it just wont beand you know it. Thats what this is about. ^[13]

His specialty became credit markets, corporate finance and the Federal Reserve. Pittman had started writing about the financial implosion early. In June 2007, he chronicled how the ratings agencies were concealing risk on $200 billion worth of questionable mortgage bonds by failing to cut the bonds credit ratings. ^[14] At the time, the story attracted sharp criticism from other journalists (later retracted when the charge proved true). In December 2007, he contributed to a series on subprime mortgages, postulating that if only five percent of US mortgage borrowers missed monthly payments, it could lead to a global freeze in lending. ^[15] The story was part of a series that won a Gerald Loeb award (the apogee for financial journalism) for News Services in 2008. ^[16]

But the more he researched the situation, the less Pittman understood how the Fed was operating behind the scenes. He was astonished by the astronomical amount of moneysome $2 trillion in taxpayer money by spring 2008that the Fed had lent to banks. While the cumulative number was public, the Fed had not specified which institutions had borrowed money through its emergency lending programs; it also had not made public what collateral, if any, the banks had offered for the loans.

In May 2008, Bloomberg filed a Freedom of Information Act request asking the Fed for details about four lending programsthe Discount Window, the Primary Dealer Credit Facility, the Term Securities Lending Facility, and the Term Auction Facilityincluding the borrowers names and the amounts borrowed. Mark Pittman said all right, youve got this program. I want to know who borrowed, how much, when, and what, and his favoritewhat collateral did [the banks] put up? recalls Ivry, Pittmans colleague.

Response . The Fed proved reluctant to give Bloomberg News the information Pittman had requested. It argued that if it identified banksthat had taken emergency loans through the discount window, it could cause a run on those institutions, undermine the loan programs and potentially hurt the economy. ^[17] It was, explains Ivry, a question of stigma:

Stigmas big in this story. If a bank goes to the discount window and says, I need a loan, and people find out that that the bank went to the discount window, theyre going to think that the banks in trouble. And the depositors are going to start pulling their money. The creditors, the folks who have bought their bonds or lent them money will say, pay me back. And a lot of the counterparties in trades will say, we dont want to trade with you anymore. And itll be a kind of a modern day run on the bank.

Ivry explains the effect of stigma on banks.

But in September 2008, the crisis claimed its first major financial sector victim. On September 15, 2008, Lehman Brothers Holdings Inc., a global financial services company, declared bankruptcy. It was the largest bankruptcy in history. ^[18] For the next several weeks, the world held its breath while the Federal Reserve, the US Treasury and other governments worldwide scrambled to keep financial machinery running via targeted infusions of capital.

One of the largest interventions came from the US. In October 2008, the government intervened to prevent what many were coming to fear would be the collapse of the US banking system. On October 3, President George W. Bush signed into law the Troubled Asset Relief Program, or TARP, as part of a broader Emergency Economic Stabilization Act. TARP allowed the US Treasury to purchase or insure as much as $700 billion of bad assets owned by financial institutions. ^[19]

Fizzled scoop . TARP got a lot of media and public attention. But Pittman remained interested in the larger picture of total government spending. So in November 2008, he and Ivry decided to try to figure out how much money the government and the Federal Reserve were committing to rescue the banking system, recalls Ivry. ^[20] For two intense weeks, they placed calls to every agency they could think of, including the Treasury, the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Department of Housing and Urban Development (HUD). They added up all the numbers they could verify, from public and private sources. The result took them aback.

On Monday, November 24, 2008, they published their findings: the US government had pledged $7.7 trillion in taxpayer dollars to support banks. ^[21] The number we came up with was staggering, recalls Ivry. It made the TARP numbers look small. On October 27, the Fed alone had committed to buy up to $2.4 trillion of commercial paper (which companies use to pay bills). Overall, the Fed had pledged $4.74 trillion61 percent of the total $7.76 trillion. These were not empty promises: Federal Reserve lending for the week of November 17 had been 1,900 times the weekly average for the three years pre-crisis. Yet the story, says Ivry, landed with a thud.

It was as if the numbers were too high, too unbelievable. When we werent ignored, we were vilified. Pittman and I were being irresponsible, people said. Didnt we know there was a crisis going on? Anything we did to slow the money train could have dire consequences for the world financial system, our critics said. ^[22]

But Ivry and Pittman were convinced that this was the biggest storynot financial story, but story of our careers, notes Ivry. They felt the publicand Congressshould know how much its government was willing to spend to keep the banks solvent.